The Russian government has been working on the development of a digital form of the national currency, the digital ruble, for several years. This year, tests on the digital ruble are set to begin, with 15 Russian banks, including Gazprombank, participating in the preliminary tests.
Russian banks might struggle because of the digital ruble
Gazprombank has raised concerns about the potential losses that banks may face with the introduction of the digital ruble. According to the bank, the reduction in acquiring commissions may result in higher profits for retailers instead of lower prices for consumers, which could lead to a decline in income for banks.
Analysts from Yakov and Partners (formerly McKinsey in Russia) have estimated that Russian banks could lose as much as 50 billion rubles annually, while retailers are expected to save at least 80 billion rubles each year.
To mitigate these losses, Gazprombank has advised a gradual launch of the digital ruble to give the financial system enough time to adapt.
The bank recognizes that the introduction of a digital form of the national currency will increase the transparency of financial transactions, which will have a positive impact on the country’s banking system and economy as a whole.
Russia’s latest crypto adventures
In related news, the biggest bank in Russia, Sberbank, is getting ready to introduce a decentralized financial platform based on the Ethereum network.
The purpose of the platform is to provide clients with an alternative means of accessing financial services and to pose a challenge to the conventional banking system.
This is not Sberbank’s first foray into the world of cryptocurrencies; the platform is now in the closed beta testing phase of its development.
The bank was the originator of Russia’s very first exchange-traded fund that uses blockchain technology, and it already has a license to issue and trade digital assets.
Finance Minister Anton Siluanov has highlighted the interest of the Russian budget in the digital ruble due to its transparent nature. The digital ruble is considered to be reliable as the Central Bank of Russia issues it.
Gazprombank is one of the banks participating in the preliminary tests for the digital ruble, and while it recognizes the potential benefits of this new form of currency, it is cautious about its impact on the country’s fiat currency.
The bank has therefore advised for a gradual launch of the digital ruble to minimize any losses for the financial system and give it enough time to adapt to this new form of currency.
The introduction of the digital ruble and Sberbank’s new decentralized finance platform are significant developments for the financial system in Russia.
While Gazprombank and other participating banks are cautious about the potential impact of these new forms of currency on the country’s fiat currency, they recognize the benefits that these could bring to the banking system and economy as a whole.
With a gradual launch and a proper consideration of the potential risks and benefits, these developments could prove to be positive steps forward for Russia’s financial landscape.